ETSU Bureau of Business and Economic Research has released the fourth quarter 2008 retail sales results for the Tri-Cities area. You can see the ETSU full report by clicking on the link. Tri-Cities Retail Sales Report
Note the steep inclines in the graph below for Johnson City and Bristol Kingsport did have growth but not as much as compared to Johnson City and Bristol. Kingsport is just now picking up the sales that it lost due to Sams Club moving to Johnson City. From the years 2000-2008, Kingsport increased $219.1 million in sales and Johnson City picked up $466.5 million for the same period.
In the last four years with Dennis Phillips as Mayor, Kingsport has grown less than Johnson City and Bristol in terms of retail sales growth. For the years 2004-2008 Johnson City had $264.2 million, Bristol had $138.5 million and Kingsport had $112.5 million in new retail sales growth. Clearly, Kingsport has been the laggard in the retail sales for the Tri-Cities area in the last four years. But, I think Kingsport just might be the biggest spender of taxpayers money in the Tri-Cities area.
Take time to look at the facts and try to understand them and do not take for granted what the Kingsport public relations machine gives you as the gospel. See the Tri-Cities Retail Sales Report for the data.
THE TRI-CITIES
As expected, the deepening recession overwhelmed the urge to spend during the holiday selling season. During the fourth quarter, dollar sales fell 1.8% in Kingsport, 2.8% in Johnson City, and 7.1% in Bristol. Adjusted for inflation, holiday sales volume decreased 3.1% in Kingsport, 4.2% in Johnson City, and 7.1% in Bristol. In comparison, real sales were down 8.9% in Tennessee and 9.0% in the nation as a whole.
For the year 2008, Kingsport reported the smallest decline in retail activity with a loss of only 0.4% in inflation adjusted sales. Retail volume decreased 3.3% in Johnson City and 7.7% in Bristol. In comparison, real sales were down 6.3% in Tennessee and 3.8% in the United States
THE METROPOLITAN AREAS
During the fourth quarter, dollar sales in the Combined Statistical Area (CSA) declined sharply, falling 7.8% to $1,573 million. Adjusted for inflation, retail volume in the Tri-Cities metro area was a 9.2% below the same period in 2007. Dollar sales and sales volume decreased in all seven metro counties. The smallest loss was reported by Hawkins County, followed by Unicoi, Carter, Washington (TN), Scott, and Washington (VA) counties.
he recession also caused a miserable holiday shopping season in the nation and the state. In the United States, dollar sales decreased 7.6% to $1,094 billion. Adjusted for inflation, real sales were lower by a staggering 9.0%. This marks the fourth decline in a row, after twenty consecutive quarters of real growth during the 2002 to 2007 business expansion. Tennessee suffered a similar retail performance. Dollar sales fell 7.5% to $20.6 billion, and sales volume was 8.9% below 2007 levels. Retail activity has now declined for five consecutive quarters in Tennessee, creating the prospect of a one billion dollar deficit in the state budget.
Looking at the annual data for 2008, the dollar value of retail sales fell only 0.2% in the nation to $4,475 billion. But adjusted for inflation, real sales in the U.S. were down 3.8%, compared to a 1.1% increase in 2007. Retail sales in Tennessee decreased 2.8% to $82.1 billion. Sales volume in the state dropped 6.3%, compared to a 0.6% increase in 2007.
ANALYSIS
There are no surprises in this report. It is now well understood that the nation is in a major recession, and that business conditions will continue to get worse, before they get better. The last time we saw such bitter economic news was the severe recession of 1981 and 1982. It is worth recalling that the federal government under a Republican President and with a Democratic Congress undertook a massive stimulus package of tax cuts and increased spending. They were successful, but in retrospect, they probably should have done more.
The overriding danger in this recession is not its severity, but the meltdown and continuing dysfunction of the financial system. As Ben Bernanke, Chairman of the Federal Reserve, has stressed, there will be no recovery until the financial system is healed. And the last time the financial system collapsed was in the early 1930s, and we know what that led to.
The central bank has been pumping massive amounts of liquidity into the financial system, and the federal government is undertaking the largest fiscal stimulus since the Depression and World War II. But the financial system remains paralyzed and the credit flows necessary for our capitalist economy to function are not being provided.
The economic outlook for the nation and the region depends upon events in the financial system. If there is an early resumption of normal financial operations, business activity would quickly recover. If the financial system continues to malfunction, the recession will last longer, and the ultimate government intervention in the financial system will be more drastic.
With this in mind, if the financial system begins to function normally over the next several weeks, then an end to the recession by late spring or early summer is very probable. Then we can fret over when the recovery will begin and will it be strong or weak. And if we are very lucky, a year from now we will be concerned about tight labor markets and inflation dangers.
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